SHREERAM FINANCE CORPORATION versus YASIN KHAN AND OTHERS

Citation: [1989] 3 S.C.R. 484 · Decided: 21-07-1989 · Supreme Court of India · Bench: K.N. SINGH · Disposal: Dismissed

Judgment (excerpt)

A 
B 
SHREERAM FINANCE CORPORATION 
v. 
YASIN KHAN AND OTHERS 
JULY 21, 1989 
[K.N. SINGH AND M.H. KANIA, JJ.) 
Partnership Act, 1932: Sections 59 and 69-Suit filed by 
registered firm-Person suing-Not shown as partners in Register of 
Firms-Suit whether maintainable. 
C 
Under a Hire Purchase !lgreement entered into with the appellant, 
a firm reglst~red under the Partnership Act, 1932, carrying on the 
business of hire-purchase !lf automobile vehicles, Respondent No. 1 
hired the truck owned by the appellant, under the agreement Respon-
dent No. 1 !lgrfed to pay Uiitial hire charge of Rs.10,000 and certain monthly 
hire charges on due dates. On the failure of Respondent No. 1 to pay the 
D monthly hire charges, after paying the initial hire charges and charges 
for one month, the appellant filed a suit against Respondent No. 1 and 
bis guarantor on July 22, 1968, for the recovery of a sum of 
Rs.13,422.23 for breach of terms and conditions of the agreement. 
There was a change in the constitution of the firm on July 1, 1967 
E 
with the retirement of two of the then partners, and addition of one new 
partner as also admission of two minors to the benefits of the Partner-
ship. This change was notified to the Registrar of Firms on August 28, 
1968 and was duly taken note of in the Register of Firms subsequently. 
Thus, no notice of the change had been given to the Registrar of firms. 
The Trial Judge dismissed the suit as not maintainable In view of 
F 
Section 69(2) of the Partnership Act, 1932. Upholding this decision, .the 
High Court dismissed the appeal of the firm. Hence, the appeal, by 
special leave, by the appellant firm. 
Dismissing the appeal, the Court. 
G 
HELD: Sub-section (2) of Section 69 of the Partnership Act lays 
down that no suit to enforce a right arising from a contract shall be 
J 
instituted in any Court by or on behalf of a firm against any third-party 
~ 
unless the firm is registered and the persons suing were or had been 
shown in the R~r 
of Finns as partners in the firm. [487C) 
H 
ln the present case, tht! suit tiled by the appellant firm is clearly 
484 
RNANeE-eeRPN:·-v. YASIN KHAN !KANIA, J.] 
485 
-1 
hit by the provisions of sub·sectiori (2) of Section 69 of the said Partner-
A, 
ship Ad, as on the date when the suit was filed, two of the partners 
._,
• 
shdwn as partners .as per _the relevant entries in the Register of Firms 
• 
were not, in fact, partners, one. new partner had come in and two 
~~ 
minors had been admitted to t}le benefit of the partnership firm regard-
f 
Ing which change no notice was given to the Registrar of Firms. Thus, 
~-
the persons suing, namely, the current partners as on the date of the 
B 
suit were not shown as partners in the Register of Firms. Therefore, the 
suit was not maintainable in view of the provisions of sub-section (2) of 
section 69 of the Partnership Act, 1932. (4871).E) 
) 
Although the plaint was amended on a later date, that cannot save 
the suit. 
c 
t" 
CIVIL APPELLATE JURISDICTION: Civil Appeal No. 1548 
of 1974. 
From the Judgment and Order dated 12.12.1972 of the Bombay 
High Court in F.A. No. 152 of 1972. 
D 
V.A. Bobde, B.R. Agarwala ahd R.B. Hathikhanwala for the 
Appellants. 
) 
M.S. Gupta for the Respondents. 
E 
The Judgment of the Court was delivered by 
KANIA, J. This is an appeal by special leave granted under 
Article 136 of the Constitution of India against the judgment of a 
Division Bench of the Bombay High Court (Nagpur Bench} in First 
Appeal No. 152 of 1972, the judgment having been delivered on 
F 
December 12, 1972. 
The appellants are a firm registered under the Partnership Act, 
1932 and inter alia carry on the business of hire-purchase of auto-
mobile vehicles. The appellants were the owners of a diesel truck 
complete with tools and other accessories. On January 24, 1962 
G 
respondent No. 1 hired the said truck from the appellants under a Hire 
Purchase Agreement in writing of the same date. Under the said 
agreement, respondent No. 1 agreed to pay to the appellants a sum of 
Rs.10,000 as initial. hire charges and certain monthly hire charges. It 
was provided under the said agreement that on the payment of all the 
monthly hire charges and other amounts payable under the agreement 
H 
486 
SUPREME COURT REPORTS 
[1989] 3 S.C.R. 
on the respective due dates and fulfilment of the other terms and 
A conditions of the agreement, respondent No. 1 would have the option 
-to p11rchase the said truck. However, 

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